As more and more of our business and personal activity is done online, “cyberrisk” becomes more prominent and the financial risk grows for both individuals and companies. The predominant issue for many is the concern of data breach. Data breach can take many forms, but all of them involve personal information — such as credit card numbers, Social Security numbers or passwords — being released to an untrusted environment. By untrusted environment, it not only means being obtained by thieves or hackers, but also just being unsecured or lost.
As has been demonstrated on an almost daily basis, sophisticated clients have been susceptible to data breach either through inadvertence, negligence or theft. Recent examples of such include Wells Fargo & Co. being investigated by the Connecticut attorney general for potentially disclosing customers’ Social Security numbers as part of a fraud investigation when it forwarded subpoenas to customers that contained the Social Security numbers of other customers. Another example is an Israeli government contractor copying files from government computers containing personal information of more than 9 million Israelis and then posting that information in a searchable file online.
